Considering the collapse of equity markets worldwide since 2008 many investors are wondering if diversification is dead. According to a research paper released by Allianz Global Investors, diversification is still important. However diversification has to be done among various asset classes such as stocks, bonds and includes cash.

“The Importance of Diversification” Chart (click to enlarge):

Source: Allianz Global Investors

Some observations from the chart:

In 2008, long-term bonds were the best performers with a return of 24%

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